33 thoughts on “Why the licence fee isn’t the best way to fund the BBC”

  1. Posted 18/07/2014 at 11:05 | Permalink

    Something else I’ve been wondering about is the cost to the taxpayer of maintaining the BBC as first choice in the Electronic TV guide on every TV in the land.

    Currently the first several options in the TV, radio & HD section of the EPG from which viewers select programmes is always a BBC channel. Naturally this gives them an advantage – the first listing in any menu always gets an advantage (see Google where companies pay to get top rankings) – any commercial organisation would love to be top of the list of options and would pay handsomely for it.

  2. Posted 18/07/2014 at 11:27 | Permalink

    Agreed, Anonymous. There was lots of evidence in the Nudge book that there’s a high degree of inertia in terms of people being unwilling to move away from the ‘default options’. I imagine that lots of people start browsing programmes to watch with the BBC channels, meaning that they are likely to benefit strongly from this effect.

  3. Posted 18/07/2014 at 12:10 | Permalink

    I do think there is a role for a public service broadcaster which is funded by a mandatory license fee, but I also think that the scope of the services funded by the license fee should be strictly limited.

    In my view, a license fee funded public service broadcaster should exist for one primary reason – to be able to provide public service announcements issued by the government in the event of war, civil disturbance, or natural disaster that seriously impacts the country’s infrastructure.

    Although such announcements could be delivered by commercial broadcasters, it would be incumbent upon the public service broadcaster to maintain a broadcasting capability that could be deployed when commercial broadcasting networks might be beyond practical use. The license-funded BBC was and probably is the logical provider of this.

    As a secondary service, the public service broadcaster could provide UK and world news, along with educational programs such as proper documentaries, quality children’s programming, Open University programming, etc. News would be bought from the many reputable news agencies, and not obtained by sending teams of people all over the world.

    There would be no justification for the license fee funded public service broadcaster to be involved with light entertainment programming, sports programming, or digital media delivery.

    I believe that compared to what they do now, and what they should be doing as a public service broadcaster as defined above, the BBC license tax would probably cost no more than £20 per year, and I would be happy to pay that amount.

  4. Posted 18/07/2014 at 13:08 | Permalink

    The licence fee use to fund 2 BBC TV channels and 5 national radio stations. This has ballooned to at least 9 TV stations and 12 national radio stations, plus online and a few international ones to boot. Im not sure how the BBC justifies so much programming that one person alone or family could not consume.

    I concur with the above comments, that there is an argument for a basic tax funded service for less than £30 a year, which might take the BBC back to basics.

    Lets be honest, we had better quality TV when the BBC only had 2 national telly channels.

  5. Posted 18/07/2014 at 13:14 | Permalink

    Most evenings I look at the BBC listings and am lucky if there is one programme I want to watch, but I do always watch the 10pm news.

    In every bulletin however we have to watch the reporters standing outside a dark building to give their report – last night you could just read the Foreign Office sign as someone told us there were no new developments with the plane crash. Why do we pay for this? A few months ago Huw Edwards decamped overseas to be filmed on his hotel balcony each night with the same neon sign over his shoulder.

    Does anyone at the BBC ever consider this as wasteful or just contemplate our bottomless pockets.

  6. Posted 18/07/2014 at 13:36 | Permalink

    I do not pay anything towards the bbc… in fact I regret now being forced under criminal law to pay in the past… it is a form of commercial fraud. I see no need for the bbc or any imposed license/TAX fee… there are many commercial organisations that provide all the services that are currently taxed on and funded by the public whether they watch them or not. I know many who have no interest in the sport coverage that the bbc wastes millions on or on the daily soaps that reflect what some anon. editor deems as necessary. If the bbc was as valuable as it claims then let it fund itself by the same method that Sky has successfully used given that the bbc has recently wasted a £100 million of tax funds on a failed digital add on. The quicker this out of touch backward looking gravy train service folds will show the world that the UK has finally moved on.

  7. Posted 18/07/2014 at 14:20 | Permalink

    Those in favour of Extortion funded entertainment are just asking someone else to fund their lifestyle.

  8. Posted 18/07/2014 at 15:14 | Permalink

    I’m not convinced that the BBC was necessary in the 1930s – the USA never had a public broadcaster, advertising worked there as it has done here. It was wrong then, let alone now!

  9. Posted 18/07/2014 at 15:26 | Permalink

    Evident that Heath argues from the position of a privileged communist, ie one of those dictating to the proletariat. Would that not be a source of bias?

    The matter of trust is crucial – trust in reporting others’ words without twisting them, or broadcasting selectively cobbled edited versions, crucial ommissions, or simply denying voices they don’t like access. This could be fixed by implementing a Netherlands model of broadcasting?

    But what on earth is the BBC doing on the internet? Is that a trojan horse for an internet tax?

  10. Posted 18/07/2014 at 21:48 | Permalink

    The BBC is required to defend its position in the run-up to its Charter review; it’s part of its remit. It’s no more interesting or uninteresting than any company seeking to explain why it succeeds.

    Of course, being an IEA article, you’d rather this was argue from commercially-funded means. This belief, that the means of funding is more important than the ends – ironically – means your own article uses the ‘trick’ of arguing against the debate in your own terms. It’s for this reason that you completely fail to attack the non-market argument Heath posits – namely, that no two programmes can be compared as ‘products’ like any other market-based system. It’s another argument whether public/cultural ‘goods and market forces are mutually beneficial – but that’s not a starting point for your article (naturally).

    It’s not actually arguable, while the BBC exists, to state that commercial operators survive and thrive when the Beeb provides much of the production sectors’ training and an artificially-imposed ‘benchmark’ for investment which other broadcasters compete against. Most of the independent companies that supply other channels were built by BBC-trained producers. Britain has a reputation the world over for television – and we export more TV formats and factual output than any other nation. Why is this? Lots of other countries could do so – but why the UK? Because the licence fee provides a stimulus that bolsters the entire market.

    Without the forced investment of the licence fee – it’s probable that American content would become more prevalent on our screens; the US is a much bigger market and it’s cheaper for broadcasters to acquire these programmes than to make their own. After all, this is how Sky succeeded. The fact Sky currently makes its own programmes is a case in point. It was effectively persuaded to do so because most surveys state British audiences want indigenous programming. They are used to this because we have a public service broadcaster that provides the market with a high-level of home-grown output. Again, look to any other country in the world and why are they not producing so much indigenous content? We cannot know for sure that current levels of British-made content would remain at the same level without the artificial stimulus of the licence fee.

    You have mentioned technology allows people to be excluded who don’t want to pay. Accepting your argument that the BBC’s aim (to broadcast to all citizens and serve them as such ‘free at the point of use) is irrelevant in the modern age, you’d still be requiring people to invest in technology they may not possess. After all, most TV viewing in the UK is free-to-air, through non-decoding Freeview boxes or TVs. And – again – arguments against the licence fee always fail to mention radio – a sizeable chunk of what the BBC is for; how do you exclude non-subscribers from accessing radio?

    You suggest that the BBC does not aim programmes or services at customers, but this ignores the BBC’s own audiences department which solely focuses on what various audiences ‘want’ or would like – and, as a programme maker myself, the BBC is no different to any other broadcaster in this sense. Of course, it *is* different in terms of how much risk it can take (in terms of genre or topic) and it has the ability to appeal to niche audiences not served by (even) Channel 4 any longer.

    The ‘risk capital’ is real – why did the BBC manage to invent and make iPlayer work before Sky? Sky actually has higher revenues than the BBC so this wasn’t an instance of the BBC crowding out market players. Instead, this was an advantage of its guaranteed funding and its ability to be less risk averse. Audiences wanted to watch television in this way – and yet no commercial provider had made it work. Now they’ve all copied this service – but they didn’t start it.

    You miss the point about subscription charges – the BBC fears this not because people would necessarily stop paying, but because it fundamentally changes the nature of what it’s for – but, you’ve already stated you don’t agree with its purpose. In a world of choice, we have subscription-funded services already – several in fact. The BBC operates a different model in a mixed-funded broadcast market.

    I’m not going to defend people going to prison who don’t pay the licence fee because I can’t. And I can’t argue the BBC should be producing entertainment or its more commercial output. But, I could argue that it still serves audiences which commercial players ignore. Accepting the ‘tax’ is regressive, its best defence is the maintenance of quality and innovation through risk-taking owing to its guaranteed funding – and, more than this, continuing to bolster the British production sector to compete globally, while maintaining a high benchmark of home-grown output.

  11. Posted 18/07/2014 at 23:35 | Permalink

    Interesting that Media Gaucho speaks so highly of BBC trained staff. Remind me, which BBC staff worked on Game of thrones, The Sopranos, 24, The Walking Dead or Breaking Bad? Is it approaching zero?

    The BBC is an incredible drag on the quality of UK broadcasting, the quicker it dies the better

  12. Posted 19/07/2014 at 00:08 | Permalink

    All of this is beside the point.

    For all the Conservative-baiting the BBC engages in, the British people (including many Conservative voters) rather like it and our Prime Minister and his followers have ably demonstrated they lack the will power to engage in any argument from a position of conviction. The most radical reform would be a switch to direct tax-payer funding.

    Sadly, organisations like the IEA, no longer represent Conservative thinking and your arguments, no matter how convincing, fall on deaf ears in Number 10. Who poked Conservatives in the eye, by inserting Lord Patten at the BBC Trust, and now favours either Diana Coyle or the Cameroon Lord Coe (Osborne favourite, too), as his replacement? It doesn’t seem worthwhile to hope for radical change, does it?

    Also, don’t forget that Dave needs as many eyes and ears tuned to the BBC’s europhilia, in the run-up to the EU referendum, so any fundamental change in the BBC’s cosy arrangement is unlikely. I doubt that the BBC’s defence of the poll tax is a result of fear for its future, but rather the provision of arguments for its supporters, in the likely heated pre-Licence-Fee-renewal years.

    The Right has lost.

  13. Posted 19/07/2014 at 13:19 | Permalink

    RE: Anonymous on Fri, 18/07/2014 – 12:05.

    All the public service broadcasters (BBC, ITV, Channel 4, Channel 5) are ‘gifted’ the high EPG slots for free in return for certain public service obligations imposed by the regulator, OfCom – i.e. regional programming, current affairs and news. As such, commercially-funded broadcasters also potentially benefit from these prominent slots.

  14. Posted 19/07/2014 at 13:33 | Permalink

    Which sector has a long long record of low productivity improvements?
    The public sector.
    This is hardly surprising because its ethos is to spend all money allocated to it and then ask for an increase on top each year. There can be no better way of guaranteeing low productivity with unjustifiably high salaries for top staff awarded by themselves. There is not the slightest element of competition.
    The public has changed to today have more classes races etc so there is no longer a broad church the BBC can appeal too.
    Like every other part of the public sector the BBC has become stuffed with left liberal staff because a cost plus high salary low performance public body makes an attractive home.

    The UK future is that there will be ever decreasing sums of money due to an ageing declining workforce combined with massive and ever rising unfunded liabilities from the rising numbers of the old.

    The BBC is one on many public sector bodies that are a blast from the past.
    Sorry the late twentieth century is not going to return. The public sector will be forced to become more productive, much against its wishes and in part because there will not be as many people in future to staff it.
    Left liberals prefer to live in the past because they cannot engage with a reality where money will have to be stretched further and further and cuts are inevitable in the longer term. The approach is to pretend the problem does not exist and hope it will go away. It won’t because it is a systemic problem that will get worse and worse for many future decades

  15. Posted 19/07/2014 at 16:52 | Permalink

    @Media Gaucho

    All except the BBC are commercial broadcasters who have certain public service commitments imposed upon them as part of their broadcasting license, for which they pay handsomely.

    The BBC exists by Royal Charter specifically as a public service broadcaster, and as such should only use taxation funds (ie: the license fee) to provide true public service programming. If they want to provide other programming such as sport, light entertainment, digital media, etc. then they should fund this commercially via advertising, or via sales through BBC Wroldwide, and compete in those arenas as a commercial broadcaster, just like the others have to.

  16. Posted 19/07/2014 at 19:58 | Permalink

    @mediagaucho – it is simply untrue that Ryan is arguing this from a commercial point of view. The issue of whether broadcasting is a club good or a public good is asked together with the question of how public service broadcasting should be funded if it is to be publicly funded. These are important economic issues that need serious attention.

  17. Posted 20/07/2014 at 11:26 | Permalink

    RE: EPG slots: it’s only recently that Sky stopped charging the BBC anything up to £9 million a year for their slots. Slots are a significant part of Sky’s funding and smaller channels have in the past claimed to have been virtually driven to the wall by the cost and Sky’s intransigence. The BBC/ITV/C4/C5 negotiations went on for years and a company without such corporate heft had no option but to pay up.

    It’ll be interesting to see if Elisabeth Murdoch’s company Shine TV (makers of Masterchef) changes direction now that they’ve employed the BBC Commissioner Tanya Shaw as their Creative Director. Looking at her credits, probably not.

    I’d be happy to see the BBC shrunk but to argue it in Manichean terms is to misunderstand the broader industry.

    Any system would be perfect if only it didn’t need people to operate it. I’ve worked in both the private and the public sectors and have seen brilliance and catastrophe in both. The only commonality is the immense effort that both ‘sides’ put into concealing their more monumental cock-ups.

  18. Posted 07/08/2014 at 14:41 | Permalink

    I do not agree with the licence fee for all the reasons previous contributors have stated plus one: there is a culture of an incumbent job-for-life mentality and reality from engineers, technicians, presenters, “stars” etc. Independent channels work on the premise that you come in, do your show, collect your cheque and you’re out the door until the next one. Not so at the beeb, once you’re in, you’re in. Viz the Dimblebys. Office space was provided at the Beeb,probably still is. It may also explain why so many perverts had such a strangle hold for so long, aided as they were, by the veneer of respectability as a publicly funded broadcaster, which shielded those doing wrong for so long.

  19. Posted 02/03/2015 at 14:40 | Permalink

    I think discussing how the BBC is funded is less useful than discussing why it still exists at all in this internet age. The whole idea of a state owned broadcaster is a preposterous anachronism.

  20. Posted 31/03/2015 at 02:33 | Permalink

    The BBC concept is based on a long gone time when there were large sections of the public with similar values, tastes, and beliefs. It was possible to drum up huge audiences on Radio and then Television on a few channels. The UK is increasingly multicultural with many non-compatible beleifs and cultures and instead of three classes there are around 6-8.

    The BBC worries there are not enough people from other cultures listeing to Radio 2. You could fill Radio 2 with mulitcultural msic but who will bother to listen as it means then 50%+ of the music will be of zero interest to the vast majority from one culture or another.

    The BBC is living in the past.
    The BBC concept is well out of date. Today people are moving on from multi-channel TV services to streaming services which learn what your choice is and offer other programmes/series you have not tried. You only need watch or listen to programmes that are tuned to you.

    The place for a public serivce today in this environment is small. The US has few Public Brocasting serivies and some of these are eonly accessible via the web and its population is serveral times the UK’s.
    Naturally the BBC wishes to carry on as before but can only become more and more of an expensive anachronism.

  21. Posted 06/04/2015 at 21:26 | Permalink

    During the recent Scottish Referendum campaign certain facts came to light re the “”clear bias “” shown by the bbc in supporting the union or the UK state…. amongst these were the links between leading members of the bbc and the labour party…. I have included some of these links as they are well known within Scottish circles but the bbc has form in keeping these facts from the general public in the remainder of the UK. Therefore many Scots have now decided to stop paying the Tax/fee as a consequence of this blatant partisanship. Rather than holding BOTH side of the argument open to investigative reporting … the bbc openly sided with the Uk establishment and carried out a form of indoctrination well beyond the principle of fairness & equality. When Scotland finally achieves Independence those who manipulated their position of trust will hopefully be held accountable and will no doubt find the opportunities South of the border more suitable.





    I could easily go on…. but for a publicly funded broadcaster who uses the Tax/fee to promote one particular brand of politics and has been openly blatant…. there is no forgiveness.

  22. Posted 07/04/2015 at 11:34 | Permalink

    “but for a publicly funded broadcaster who uses the Tax/fee to promote one particular brand of politics and has been openly blatant…. there is no forgiveness.”

    I does not strike me as very important because it presupposes any state owned broadcaster can do anything other than favour the state. Anything that is state owned, it is a creature of politics, and the BBC’s customer is not the viewer, it is not *you*, it is the state who gives it money to exist. He who pays the piper calls the tune.

    What the BBC actually says, i.e. whose biases are currently the received wisdom, simply does not matter. The very fact the BBC exists is the problem.

  23. Posted 07/04/2015 at 18:53 | Permalink

    Certainly it should not exist … that is why YES supporting Scots are boycotting the bbc… as the case was they were openly supportive of the unionist cause… they made no attempt to be fair by examining both sides … they decided by taking an active part in promoting pro unionists whilst disguising them as “” independent “” experts.. or bloggers…. and by constructively ignoring many issues including the 33,000 people who marched through the streets of Edinburgh with not a word on ANY news broadcast… and this is a small example of the many deliberate acts that must have had some form of editorial decision.
    One Radio 4 Today announcer was given a special remit to report on the Referendum with 3 researchers & a unionist editor. … with his particular reportage coming in for serious criticism from Strathclyde University’s survey on the bias shown by the bbc in favour of the union. …But… was there any change?… did the bbc respond to the thousands of complaints by changing their attitude?… was any of the labour party/bbc staff moved sideways?…. therefore… if they can not be trusted in this form ..how much faith can you have in whatever else they report on?… as they are now regarded as a mouthpiece for the Uk establishment….

  24. Posted 08/04/2015 at 12:48 | Permalink

    “as they are now regarded as a mouthpiece for the Uk establishment…. ”

    Well of course they are… they always were, and always will be, until they are de-funded, disbanded and consigned to history.

    “did the bbc respond to the thousands of complaints by changing their attitude?”

    Why should they? Those thousands of complainers are not their customers. The state is their customer because they collects mandatory taxes from people for the ‘privilege’ of owning a TV. If the BBC was a subscription service, then the subscribers who want to inflict the BBC on themselves would be their customers. If the BBC was advertising based, the viewers would still be their customers, as they need eyeballs or the advertisers go away. However as I have to pay for the BBC whether I watch the damn thing or not, I am not their customer and quite rationally they do not give a damn what I think: they get my money regardless even if all I watch is Sky and Syfy.

    Every part of the state is a mouthpiece, or an arm, or a foot, or a fist, of the UK establishment, that is rather the point and is an inevitable consequence of the whole “tax funded” thing. The state is the BBC’s customer. A bit like the NHS actually, where the state is the customer and patients are liabilities rather than a source of profit.

    And if Scotland becomes independent (or England becomes independent of Scotland as I prefer to think of it), all the equivalent state funded apparatus north of Hadrian’s Wall will be a mouthpiece, or an arm, or a foot, or a fist of the equally ghastly and even more liberty averse Scottish establishment. Will there be an SBC that is much like the BBC? Of course there will, and it will be an arm of the SNP, much like the Kremlin has RT and London has the BBC.

    The state supports the interests of the state, it is a self evident truism. If you dislike the BBC, as I do, then demand the state get out of the media business entirely, because it is very strange to expect something owned by the state not to be supportive of the state that owns and funds it.

  25. Posted 12/05/2015 at 09:53 | Permalink

    Yet another reason for ending any compulsory fee from potential non-users is that, without the real financial disciple which viewers paying for their own pockets provides, there is no limit on how this monster can grow. In doing this it often suffocates other areas of the real economy. If it was set up on a commercial basis, then the issue of whether every foray into a new market was core would have to be considered. There is no such natural constraint at work currently, so it simply grows uncontrollably.

    Government should not seek to do what can be provided perfectly satisfactorily otherwise. Neither should it uphold an enforced subscription, as proposed through the council tax, as this is a clog on the individual’s right of choice.

    There is simply no way in which any of the BBC can any longer be described as an essential service, with the one exception of the World Service. Yet this has been the area which has been worst neglected by self-answerable management.

    Perhaps the worst aspect of the BBC is that there are effective ‘generations’ (probably measured in working life stages of less than ten years) of employees who have become semi-indoctrinated into believing that they are not so much answerable to their viewers as to an impersonal, dogmatic, socio-political agenda. It need hardly be stated that this does not owe anything to market freedom or customer choice.

  26. Posted 12/05/2015 at 11:03 | Permalink

    >>”There is simply no way in which any of the BBC can any longer be described as an essential service, with the one exception of the World Service.”…………….

    Amen! The only part of the BBC that should remain is the OVERT propaganda arm aimed at overseas audiences. The BBC should be an arm of foreign policy much like the army or intelligence services. There is NO role for state owned media at home!

  27. Posted 12/05/2015 at 15:44 | Permalink

    Erratum: disciple discipline

    (in my above post)

  28. Posted 14/05/2015 at 09:21 | Permalink

    Does the BBC have a pro-EU stance? Why, yes. Could it be anything to do with the £3 million that it gets from the EU? This is of course a drop in the ocean of the £3 billion it gets from the licence fee, which is spent on “research and development”. It wouldn’t be anything to do with keeping positive stories about the EU would it?
    Some drop. Some ocean.

  29. Posted 30/08/2015 at 11:09 | Permalink

    Quote from text: “No, the only real justification for the maintenance of a public service broadcaster would be to show that the BBC provides things which other market operators could not or would not.”

    By that criteria the lack of advertising alone justifies the whole BBC output. Other market operators are unable to provide continuous programming without repeated commercial interventions (advertising), unless they charge a subscription approaching or even greater than the whole BBC licence fee but for an extremely limited service.

  30. Posted 01/09/2015 at 09:54 | Permalink

    “By that criteria the lack of advertising alone justifies the whole BBC output.”

    No because how does that justify charging me for something I do not watch and have not agreed to pay for?

  31. Posted 03/09/2015 at 17:32 | Permalink

    Perry de Havilland can rest assured. If she does not watch TV then she does not need a licence.

  32. Posted 03/09/2015 at 17:36 | Permalink

    “Other market operators are unable to provide continuous programming without repeated commercial interventions (advertising)” Quite so – that’s a good reason for keeping the licence fee.

  33. Posted 24/05/2016 at 19:14 | Permalink

    The BBC calls us its customers. With us being the license payers. Customers infers choice and we have no choice if we wish to watch live commercial television with out paying a license fee. I would like to see a Sky package with no BBC, no BBC radio, no Cbeebies which would be a license free service. You could watch any commercial channels ITV, UTV, Discovery Channel , etc. How is it fair to a commercial broadcaster if their customers have to pay a license fee to watch their programming for which they have obtained paid sponsorship?
    I pay $10.00 for Netflix a month, £28.00 for sky and £10.00 for Amazon Prime. I think this is enough to pay. Why should I have to for out another £12.00 a month for something I don’t want? How is that fair to me or other people that take exception to the BBC. If I don’t like the BBC then the only other choice is not to watch live TV at all. That is not fair to me or the commercial broadcasters who would have me as a customer watching their shows.
    It seems people who like the BBC think it is fine to speak for everyone one else and say the license fee is a good idea. Like somehow making the BBC commercial would destroy the iconic British Broadcaster. It seems to me that is nostalgia as well as the BBC’s greed which is keeping this from moving to a subscription service.
    Instead of the House of Lords voting on this maybe they should have it as a referendum like the EU split.

Comments are closed.